Girlfriend went out and agreed to 12.99% auto loan.

[vbulljon]

Heres the summary, 

My girlfriend, which has NO credit, not bad nor good, just none. She can not even get a FICO score yet. 

She makes about 800 a month alone working currently part time. Her mom co signed the loan and pays the car insurance and my girlfriend agreed to pay the car payment.

I dont have the paperwork in front of me, but here are the details from what I can remember.

APR 12.99%

Car was about 11k.

4-year warranty.

$290.90 a month for 62 months

Total pay back is around 22k.

Her auto loan is through Capital One.

My question is, I am on the road to rebuilding my credit at the moment. Once I have good credit in about a year or so, could I help her re-fianance the car for a cheaper APR? or maybe Call capital one and work somthing out. How is Capital one on working with you on this situation? I also want to eventually take her mom off as a co signer.

Thanks for the answers, I am just kinda ticked that the APR is that high, would never have gone for that if it was me.

[StartingOver10]

Once she establishes credit and increases her income she can refinance on her own.

Or if you want to help her, then you can help her refinance, but realize that will mean that you co-sign unless she has enough income to support the loan.

Cap One isn't going to refi their own loan. You go to another lender to refi. Since she has no bad credit and hopefully will take this chance to make her payments on time so she doens't acquire any bad credit, she could get it refi'ed with a credit union. Her issue at the moment is her income.

I agree with you about the rate being very high. She probably caved to the first offer that the finance guy gave her not knowing that was her time to negotiate with him. If it is her first vehicle purchase/loan then hopefully she will learn from this experience. The finance department is there to maximize their own profit, not to help the consumer. Higher the rate, the more the dealership makes on the financing. They always start off high no matter what your credit profile is - unless you know enough to stop them from that nonsense.

[Carrie_in_Pa]

---

@vbulljon wrote:

Heres the summary, 

My girlfriend, which has NO credit, not bad nor good, just none. She can not even get a FICO score yet. 

She makes about 800 a month alone working currently part time. Her mom co signed the loan and pays the car insurance and my girlfriend agreed to pay the car payment.

I dont have the paperwork in front of me, but here are the details from what I can remember.

APR 12.99%

Car was about 11k.

4-year warranty.

$290.90 a month for 62 months

Total pay back is around 22k.

Her auto loan is through Capital One.

My question is, I am on the road to rebuilding my credit at the moment. Once I have good credit in about a year or so, could I help her re-fianance the car for a cheaper APR? or maybe Call capital one and work somthing out. How is Capital one on working with you on this situation? I also want to eventually take her mom off as a co signer.

Thanks for the answers, I am just kinda ticked that the APR is that high, would never have gone for that if it was me.

---

This is quite similar to a car loan situation i was in about 14 years ago. I had roughly the same income at the time too. I would have her pay on it for a year or two to get some payment history in and then she should be able to refinance herself, as long as the banks are ok with her income.

My dad cosigned for me and it wasn't a good deal for him. The car was stolen and destroyed and when it was recovered the insurance company screwed me over. My dad handled all of it from there and it wasn't pretty. I just didn't have the money to deal with that mess and get another car. Think twice before signing to helping ANYONE. You never know what could happen.

[signaturecardmember]

I have to say this rate isnt bad at all considering she has absolutely no credit history and such little income, she definately could be seen as a high risk customer. Her Mom might not have great credit either. She should feel very lucky to have been approved at all. As others said just makes sure she pays on time etc and in a year or so she can refinance.

[tonyjones]

Wow, that APR is really high and the interest accrued is insane!

[Carrie_in_Pa]

---

@tonyjones wrote:

Wow, that APR is really high and the interest accrued is insane!

---

That's about what the interest rate was for the loan i had. Sometimes i wonder the location or region has anything to do with it

[StartingOver10]

IMO I think there are two factors -

(1) Risk for the lender and

(2) the dealership gets a huge commission based on how much extra interest they charge over and above what the bank will finance. I think this rebate back to the dealer is called a 'spiff' but I am not positive that the terminology is correct.  

I think that it is not necessarily geography. IME car dealers will charge as much as they can get ...that's why we as consumers have to be educated enough to know what is in the market or above market. I know the last time I went in my score was in the low 700's and the dealership started off at a very high interest rate - I turned it down, but they certainly started there. I had a recent Bk so I was expecting above market but not in the double digits. I ended up at 7.14% - so you can negotiate. But you have to know what will fly and what won't.

With this being your g/f's first purchase I am sure they just took her to a high rate because they could - and she didn't know what to counter with in her negotiations.

[tonyjones]

---

@StartingOver10 wrote:

IMO I think there are two factors -

(1) Risk for the lender and

(2) the dealership gets a huge commission based on how much extra interest they charge over and above what the bank will finance. I think this rebate back to the dealer is called a 'spiff' but I am not positive that the terminology is correct.  

I think that it is not necessarily geography. IME car dealers will charge as much as they can get ...that's why we as consumers have to be educated enough to know what is in the market or above market. I know the last time I went in my score was in the low 700's and the dealership started off at a very high interest rate - I turned it down, but they certainly started there. I had a recent Bk so I was expecting above market but not in the double digits. I ended up at 7.14% - so you can negotiate. But you have to know what will fly and what won't.

With this being your g/f's first purchase I am sure they just took her to a high rate because they could - and she didn't know what to counter with in her negotiations.

---

Yeah My score last November 2013 was in the low 600's, I think it was 610 and I still managed to purchase a $21,000 car for $5% APR and 0% down, a used car at that one. I negotiated for almost a month before I decided.

[haveus33nm3]

---

@tonyjones wrote:

---

@StartingOver10 wrote:

IMO I think there are two factors -

(1) Risk for the lender and

(2) the dealership gets a huge commission based on how much extra interest they charge over and above what the bank will finance. I think this rebate back to the dealer is called a 'spiff' but I am not positive that the terminology is correct.  

I think that it is not necessarily geography. IME car dealers will charge as much as they can get ...that's why we as consumers have to be educated enough to know what is in the market or above market. I know the last time I went in my score was in the low 700's and the dealership started off at a very high interest rate - I turned it down, but they certainly started there. I had a recent Bk so I was expecting above market but not in the double digits. I ended up at 7.14% - so you can negotiate. But you have to know what will fly and what won't.

With this being your g/f's first purchase I am sure they just took her to a high rate because they could - and she didn't know what to counter with in her negotiations.

---

Yeah My score last November 2013 was in the low 600's, I think it was 610 and I still managed to purchase a $21,000 car for $5% APR and 0% down, a used car at that one. I negotiated for almost a month before I decided.

---

Who financed your loan?

---

@tonyjones wrote:

---

@StartingOver10 wrote:

IMO I think there are two factors -

(1) Risk for the lender and

(2) the dealership gets a huge commission based on how much extra interest they charge over and above what the bank will finance. I think this rebate back to the dealer is called a 'spiff' but I am not positive that the terminology is correct.  

I think that it is not necessarily geography. IME car dealers will charge as much as they can get ...that's why we as consumers have to be educated enough to know what is in the market or above market. I know the last time I went in my score was in the low 700's and the dealership started off at a very high interest rate - I turned it down, but they certainly started there. I had a recent Bk so I was expecting above market but not in the double digits. I ended up at 7.14% - so you can negotiate. But you have to know what will fly and what won't.

With this being your g/f's first purchase I am sure they just took her to a high rate because they could - and she didn't know what to counter with in her negotiations.

---

Yeah My score last November 2013 was in the low 600's, I think it was 610 and I still managed to purchase a $21,000 car for $5% APR and 0% down, a used car at that one. I negotiated for almost a month before I decided.

---

Who financed your loan?

[tonyjones]

---

@haveus33nm3 wrote:

---

@tonyjones wrote:

---

@StartingOver10 wrote:

IMO I think there are two factors -

(1) Risk for the lender and

(2) the dealership gets a huge commission based on how much extra interest they charge over and above what the bank will finance. I think this rebate back to the dealer is called a 'spiff' but I am not positive that the terminology is correct.  

I think that it is not necessarily geography. IME car dealers will charge as much as they can get ...that's why we as consumers have to be educated enough to know what is in the market or above market. I know the last time I went in my score was in the low 700's and the dealership started off at a very high interest rate - I turned it down, but they certainly started there. I had a recent Bk so I was expecting above market but not in the double digits. I ended up at 7.14% - so you can negotiate. But you have to know what will fly and what won't.

With this being your g/f's first purchase I am sure they just took her to a high rate because they could - and she didn't know what to counter with in her negotiations.

---

Yeah My score last November 2013 was in the low 600's, I think it was 610 and I still managed to purchase a $21,000 car for $5% APR and 0% down, a used car at that one. I negotiated for almost a month before I decided.

---

Who financed your loan?

---

@tonyjones wrote:

---

@StartingOver10 wrote:

IMO I think there are two factors -

(1) Risk for the lender and

(2) the dealership gets a huge commission based on how much extra interest they charge over and above what the bank will finance. I think this rebate back to the dealer is called a 'spiff' but I am not positive that the terminology is correct.  

I think that it is not necessarily geography. IME car dealers will charge as much as they can get ...that's why we as consumers have to be educated enough to know what is in the market or above market. I know the last time I went in my score was in the low 700's and the dealership started off at a very high interest rate - I turned it down, but they certainly started there. I had a recent Bk so I was expecting above market but not in the double digits. I ended up at 7.14% - so you can negotiate. But you have to know what will fly and what won't.

With this being your g/f's first purchase I am sure they just took her to a high rate because they could - and she didn't know what to counter with in her negotiations.

---

Yeah My score last November 2013 was in the low 600's, I think it was 610 and I still managed to purchase a $21,000 car for $5% APR and 0% down, a used car at that one. I negotiated for almost a month before I decided.

---

Who financed your loan?

---

The dealership via Chase Auto Finance.